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Papa John's founder files second suit against company

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Former Papa John's Pizza CEO John Schnatter filed a second suit against the company Thursday. File Photo by Jim Ruymen/UPI

By Sommer Brokaw, UPI

The Papa John's founder who sued the company after resigning in July following reports he used a racial slur has filed a second suit.

John Schnatter, the company's founder, largest shareholder and former CEO, filed the second lawsuit against Papa John's International on Thursday, claiming the company's leadership is causing "irreparable harm" to the business, Schnatter attorney Terry Fahn said in a statement to ABC News.

The Papa John's board and current CEO Steve Ritchie are causing harm by their "repeated, and ongoing, breaches of the duties of loyalty and care they owe to the company," Fahn's statement to ABC said.

Fahn did not comment further on the suit, which is currently sealed.

However, in a Thursday letter posted on a website Schnatter runs, savepapajohns.com, the former CEO alleges that he was driven away from the company to distract from "bad financial decisions, insufficient management skills to correct them, a toxic senior management culture, and serious misconduct at the top levels."

A public version of the complaint will be filed "on or before" Sept. 4, a document posted on the site said.

A Papa John's spokeswoman said in a Courier-Journal report that "John Schnatter will do anything to distract attention from the harm caused by his inappropriate words.

"He continues to make reckless allegations in his attempt to regain control and serve his own interests,'' the company added. "John Schnatter's latest allegations are entirely without merit, and we will vigorously defend against these baseless claims."

Schnatter filed the first suit against the company in July -- weeks after he resigned as chairman and apologized for "inappropriate and hurtful language," during a conference call in May. Months earlier, Schnatter resigned as CEO of the company after fallout from his previous criticism of NFL players for kneeling during the national anthem to protest police brutality.

In the first suit, Schnatter accused the company of breach of fiduciary duties when he was asked to resign and sought records related to his departure. His lawyers said he was seeking the right to inspect company documents "because of the unexplained and heavy-handed way in which the company has treated him since the publication of a story that falsely accused him of using a racial slur."

Olivia Kirtley, lead independent director at Papa John's, was appointed to take over as chairwoman of the company's board of directors in July.

Papa John's International also announced a plan in July that "limited duration stockholder rights," commonly called a "poison pill," to prevent any shareholder, including Schnatter, from controlling the company.